According to official documents revealed by Reuters, China has ordered at least 255 factories headquartered in Shanghai, including a large refinery operated by Sinopec, to shut down 14 days before the G20 summit to reduce pollution. The document was issued by the Shanghai Environmental Protection Bureau, which extensively ordered petrochemical bases and logistics companies to shut down between August 24th and September 6th.
According to industry insiders and government officials, relevant departments in neighboring Zhejiang and Jiangsu provinces have issued similar orders to restrict air pollution and safety hazards within a 300 kilometer radius of Hangzhou.
According to the document, there are 255 factories headquartered in Shanghai, about 200 kilometers away from Hangzhou, covering industries including chemical, building materials, pharmaceuticals, and printing. Reuters contacted four factories and learned that the government does not provide subsidies for shutdown and maintenance.
China has set a precedent for shutting down factories and restricting the operation of heavy equipment during high-profile diplomatic and sports events such as the Asia Pacific Economic Cooperation and the 2008 Beijing Summer Olympics. Jing Chunmei, a researcher in international economic exchange in China, said.
In the long run, China needs to develop market-based methods to address pollution issues, rather than issuing orders directly. In addition to social responsibility, companies also need to consider profit and loss issues.
The document from the Environmental Protection Bureau states that during the G20 summit, Sinopec's refining subsidiary, Shanghai Petrochemical Company, will see its productivity drop to 50%, with a reduction of approximately 120000 barrels of production capacity per day. Coal fired power plants in the region that do not meet emission standards will be completely shut down within two weeks, and the utilization rate of heavy machinery in the Shanghai area will be reduced by 30%.
An official from Sinopec Jinling Petrochemical Company said that another heavy refinery headquartered in Nanjing, Jiangsu was required by the local government to "appropriately reduce throughput", but no specific emission reduction scale was given. According to documents from the Environmental Protection Bureau, Shanghai Petrochemical will shut down 120000 barrels of crude oil distillation units, 3.9 million tons of hydrocracking units, 3.5 million tons of catalytic cracking units, and over a dozen other secondary refining facilities.